Alcoa v. California Cartage Company, Inc., E032819 (Cal. App. 11/17/2003)

• Decision Date: 17 November 2003
• Docket Number: E032819.
• Court: California Court of Appeals Court of Appeals
• Parties: ALCOA, INC., Plaintiff and Appellant, v. CALIFORNIA CARTAGE COMPANY, INC., Defendant and Respondent.

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ALCOA, INC., Plaintiff and Appellant, v. CALIFORNIA CARTAGE COMPANY, INC., Defendant and Respondent.

E032819.

Court of Appeals of California, Fourth Appellate District, Division Two.

Filed November 17, 2003.

APPEAL from the Superior Court of San Bernardino County, Super.Ct.No. SCV 62817, Frank Gafkowski, Jr., Judge. (Retired judge of the Mun. Ct. for the Los Angeles Southeast Dist. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Affirmed.

Carlson, Messer & Turner and Charles R. Messer for Plaintiff and Appellant.

Sands Lerner, Donald J. Sands and Joseph Cho for Defendant and Respondent.

Gaut J.

OPINION

1. Introduction

Plaintiff Alcoa, Inc., who manufactured and sold aluminum products, contracted with defendant California Cartage Company, Inc., for warehousing services. After a fire at defendant's warehouse ruined plaintiff's goods, plaintiff sued defendant for damages. The jury found defendant negligent and the court awarded plaintiff $1,000,000, the contractual limit on defendant's liability. Plaintiff then filed motions for prejudgment interest and attorney fees. Based on the limitation of liability provision, the trial court denied plaintiff's motions. The sole issue on appeal is whether the trial court erred in denying plaintiff's motion for prejudgment interest and attorney fees.

In affirming the trial court's judgment, we conclude that a court may not award prejudgment interest in addition to the other elements of damages in excess of the contractual limit. We also conclude that the provision referring to attorney fees was an indemnification clause pertaining to third party claims, rather than an attorney fees provision allowing an award of fees in an action between the parties under the contract.

2. Factual and Procedural History

On July 17, 1995, plaintiff, who was in the business of manufacturing and selling aluminum alloy sheeting products or "coils," entered into a contract with defendant for certain warehousing services.¹ On December 16, 1996, there was a fire at defendant's warehouse, where defendant stored plaintiff's aluminum coils. The fire or smoke damaged the coils.

On December 10, 1999, plaintiff filed a complaint alleging that defendant's negligence caused approximately $1,621,030 in damages to plaintiff's property. At trial, however, plaintiff presented evidence that it had submitted to defendant several claims totaling $1,916,000. The claims primarily reflected the difference between the invoice prices and the scrap values for the damaged coils.

Based on the limitation of liability provision of the warehousing contract, the parties stipulated that the total damages would not exceed $1,000,000. The jury found that defendant's negligence caused plaintiff $1,916,000 in property damage. Based on the parties' stipulation, the trial court reduced the amount to $ 1,000,000.

On August 21, 2002, plaintiff filed two separate motions: one for attorney fees and costs in the amount of $511,322, and another for prejudgment interest in the amount of $769,445. Relying again on the limitation of liability provision, the trial court denied both motions.

The court entered judgment for $1,000,000 plus $74,535.16 in costs and post-judgment interest.

In appealing from the judgment, plaintiff challenges only the trial court's denial of its motions for attorney fees and prejudgment interest.

3. Appealability

As a preliminary matter, defendant claims that plaintiff is barred from appealing the court's judgment because it voluntarily accepted defendant's payment of $1,000,000 plus the amount for postjudgment interest. Defendant's payment did not include the amount awarded for costs because, at the time defendant issued its checks, it had not yet received notice of the cost award.

In support of its claim, defendant relies on Schubert v. Reich.² In Schubert, the court observed that, "[i]t is the settled rule that the voluntary acceptance of the benefit of a judgment or order is a bar to the prosecution of an appeal therefrom."

Defendant's claim lacks merit. We initially note that defendant's claim is procedurally defective because defendant failed to submit a formal, written motion for dismissal.³ Defendant's claim is also substantively flawed because plaintiff's appeal does not involve the court's judgment as to the amount of damages and the post-judgment interest. Plaintiff is challenging the court's judgment only as to the denial of its motions for pre-judgment interest and attorney fees. The record in no way suggests that plaintiff's acceptance of defendant's checks constituted an unmistakable acquiescence of the court's ruling on these two issues.⁴

"Furthermore, where the benefits accepted are those to which the appellant would be entitled even in the event of reversal, acceptance thereof does not bar prosecution of the appeal. [Citations.] Thus, `[i]f the appeal is only from a portion of a judgment in which the issues are severable, the portions from which no appeal is taken may become final and beyond the scope of review of the appellate court [citations]; and so where the judgment clearly establishes the appellant's right to recover but the amount is less than he demands, he may accept it and nevertheless appeal, claiming the larger recovery. [Citations.]' [Citation.]"⁵

Regardless of the outcome of this appeal, plaintiff was entitled to defendant's initial payment on the judgment. In addition to the amounts received, plaintiff is seeking over $1,200,000 in prejudgment interest and attorney fees. The court's post-judgment rulings on plaintiff's motions are severable and independently appealable.⁶

For these reasons, we reject defendant's claim and proceed with plaintiff's appeal.

4. The Contract and the Rules of Interpretation

The parties entered into a contract for warehousing services. In regards to the issues raised in this appeal, the parties disagree as to the interpretation of one particular provision within the contract, namely, paragraph 15. That provision reads as follows:

"Depositor agrees to bear risk of and responsibility for loss or damage to the goods excepting loss or damage which results from intentional, wanton, reckless or negligent acts of Warehouseman, its agents or employees. Where Warehouseman is responsible for such loss or damage, Warehouseman's liability shall be limited to $1,000,000.

"Warehouseman shall indemnify and hold Depositor harmless from and against and shall at its own expense defend, any and all actions based on, and pay all charges of attorneys and all costs and other expenses arising from all fines, penalties, loss, liability, claims, suits or demands of every kind on account of injury (including death) to any person or persons, loss or damage to property of others (including employees and invitees of Depositor and/or other companies), violation of laws, rules or regulations caused by, arising out of or in any ways associated with Warehouseman's negligence related to the performance of this Agreement, including but not limited to the handling, storing, packing, labeling and shipping of the goods. Warehouseman agrees to cover his responsibilities under this Paragraph 15 by maintaining general liability insurance with a single limit of not less than $1,000,000 per occurrence. A certificate of said insurance coverage shall be provided to ALCOA with a thirty-day notification clause of prior cancellation."

In general, de novo review applies to contract interpretation when the analysis revolves entirely around the terms of the contract without reference to extrinsic evidence.⁷

In construing the various terms in this provision, we apply well-settled rules. "`The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties.' [Citation.] `Such intent is to be inferred, if possible, solely from the written provisions of the contract.' [Citation.] `If contractual language is clear and explicit, it governs.' [Citation.]"⁸ If, however, the language is ambiguous or uncertain, we interpret the contract against the party who caused the uncertainty.⁹ We define the terms of the agreement according to the ordinary and popular sense of the words, unless the words are used in a technical sense.¹⁰ We interpret the terms in context by considering the contract as a whole and giving effect to every part of the agreement.¹¹

5. Prejudgment Interest

Plaintiff argues that it was entitled to prejudgment interest under Civil Code section 3287, subdivision (a), and the limitation of liability clause of paragraph 15 did not preclude recovery.

Civil Code section 3287, subdivision (a), provides: "Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt. This section is applicable to recovery of damages and interest from any such debtor, including the state or any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state."

The requirement of certainty is satisfied if the amount of damages was readily ascertainable by mathematical calculation.¹² "`"The test for recovery of prejudgment interest under [Civil Code] section 3287, subdivision (a) is whether defendant actually know[s] the amount owed or from reasonably available information could the defendant have computed that amount. [Citation.]" [Citations.] "The statute . . . does not authorize prejudgment interest where the amount of damage, as opposed to the determination of liability, `depends upon a judicial determination based upon conflicting evidence and it is not ascertainable from truthful data supplied by the claimant to his debtor.' [Citations.]" [Citation.] Thus, where the amount of...